Without Fannie Mae and Freddie Mac, life in the world of consumer mortgages could change greatly, mostly in that the steadfast, go-to mortgage, a thirty-year-fixed-rate, could conceivably no longer be available to most home buyers. And interest rates? Life in that realm would change too without Fannie and Freddie. Down payments? That too! Can Fannie and Freddie be disbanded, yet the benefits they provide to home buyers preserved? That is a debate going on in Congress and among pundits, and changes are likely in the years to come. Can America’s mortgage world withstand privatization? Binyamin Appelbaum’s article for the New York Times, Without Loan Giants, 30-Year Mortgage May Fade Away, is a very good read on the subject, from explaining the “whys” and benefits of Fannie and Freddie’s existence to options to replace them and opinions on both sides of the debate.
~Rosemary Thompson James, Atkinson-Thompson Group